Apple and Google Fined in South Korea Over App Store Violations
Regulators mandate business practice changes following investigation into app store payment and review policies.
1Regulatory Action in Korea
The Korea Media and Communications Commission has officially determined that both Apple and Google violated the Telecommunications Business Act. Following extensive fact-finding investigations and on-site inspections initiated in 2022, the regulator issued significant financial penalties. These companies must now overhaul their local business practices to align with national market regulations.
2Financial Penalty Breakdown
Google faces a substantial fine of KRW 42.9 billion, which is approximately 32 million dollars. Meanwhile, Apple has been ordered to pay KRW 20.81 billion, equivalent to 15.6 million dollars. These penalties reflect the severity of the identified violations regarding app store management and the treatment of third-party developers within the region.
3Payment System Restrictions
The investigation revealed that both tech giants forced developers to use proprietary in-app payment methods. Furthermore, they imposed a 26 percent commission on third-party payments while strictly prohibiting external payment options. These practices restricted developer autonomy and limited the financial flexibility of businesses operating within the South Korean mobile application ecosystem.
4App Review Process Issues
Regulators identified that both companies frequently delayed app reviews without providing transparent justifications to developers. When developers submitted individual inquiries regarding these unexplained delays, the companies failed to provide adequate responses. This lack of communication created operational bottlenecks and uncertainty for developers attempting to launch or update their software products.
5Discriminatory Commission Calculations
Apple specifically faced scrutiny for calculating commissions differently based on developer location. For South Korean developers, the commission was based on purchase prices including VAT. Conversely, developers outside the country had their cuts calculated on pre-VAT prices. This discrepancy created an uneven playing field that the regulator has now formally ordered to cease.
6Mandated Operational Changes
The KMCC is now requiring both companies to accept external payment methods and revise their internal app review procedures. Apple is specifically mandated to eliminate discriminatory practices between domestic and overseas developers. These changes aim to ensure fair competition and transparency within the South Korean digital marketplace for all software providers.
7Global Context of Compliance
This regulatory pressure in South Korea mirrors ongoing global shifts in app store governance. Both Apple and Google have already been forced to allow external payment options in the United States and the European Union. These regional mandates signify a broader international trend toward curbing the absolute control of dominant platform operators.
8Future Market Implications
The enforcement of these rules marks a critical shift in how mobile platforms must interact with local regulatory bodies. By mandating procedural transparency and payment flexibility, South Korea is setting a precedent for platform accountability. Companies must now prioritize compliance to avoid further financial penalties and maintain their market access in the region.
Original article: Engadget — Apple and Google Fined in South Korea Over App Store Violations